esun Holdings Limited (Incorporated in Bermuda with limited liability) (Stock Code: 571)

Transcription

1 THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION If you are in doubt as to any aspect of this circular or as to the action to be taken, you should consult your licensed securities dealer, registered institution in securities, bank manager, solicitor, professional accountant or other professional adviser for independent advice. If you have sold or transferred all your shares in esun Holdings Limited, you should at once hand this circular and the accompanying form of proxy to the purchaser(s) or transferee(s), or to the licensed securities dealer, registered institution in securities, bank or other agent through whom the sale or transfer was effected for transmission to the purchaser(s) or transferee(s). Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this circular. esun Holdings Limited (Incorporated in Bermuda with limited liability) (Stock Code: 571) MAJOR TRANSACTION AGREEMENT IN RELATION TO ACQUISITION OF PROPERTY AND NOTICE OF SPECIAL GENERAL MEETING Capitalised terms used in the lower portion of this cover page shall have the respective meanings as those defined in the section headed Definitions of this circular. A letter from the Board is set out on pages 4 to 13 of this circular. A notice convening the SGM to be held at Harbour View Rooms I & II, 3/F., The Excelsior, Hong Kong, 281 Gloucester Road, Causeway Bay, Hong Kong on Friday, 11 December 2015 at 10:15 a.m. (or as soon thereafter as the 2015 annual general meeting of the Company convened at the same place and on the same date at 10:00 a.m. shall have been concluded or adjourned) is set out on pages 47 and 48 of this circular. A form of proxy for use by the Shareholders at the SGM is enclosed with this circular. If you do not intend to be present at the SGM or its adjournment (as the case may be) in person but wish to exercise your rights as a Shareholder, please complete and sign the accompanying form of proxy in accordance with the instructions printed thereon and deposit the same with the Company s branch share registrar in Hong Kong, Tricor Tengis Limited at Level 22, Hopewell Centre, 183 Queen s Road East, Hong Kong as soon as possible, but in any event not less than 48 hours before the time fixed for holding the SGM or any adjournment thereof (as the case may be). Completion and return of the form of proxy shall not preclude you from attending and voting in person at the SGM or any adjournment thereof (as the case may be) should you so wish and in such event, the instrument appointing a proxy shall be deemed to be revoked. 23 November 2015

2 TABLE OF CONTENTS Page DEFINITIONS... 1 LETTER FROM THE BOARD... 4 APPENDIX I: FINANCIAL INFORMATION OF THE GROUP APPENDIX II: VALUATION REPORT OF THE PROPERTY APPENDIX III: APPENDIX IV: VALUATION REPORT OF THE PROPERTY AND NORTHGATE PLAZA I UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP APPENDIX V: GENERAL INFORMATION NOTICE OF THE SGM Accompanying document: Form of Proxy This circular in both English and Chinese is available in printed form and published on the respective websites of the Company at and the Stock Exchange at i

3 DEFINITIONS In this circular, the following expressions shall, unless the context otherwise requires, have the following respective meanings: Acquisition Agreement associated corporation(s) Board close associate(s) Company Conditions connected person(s) Consideration controlling shareholder(s) Deposit Director(s) Formal Sale and Purchase Agreement Group HK$ the acquisition of the entire interest in the Property pursuant to the terms and conditions of the Agreement; the conditional agreement dated 30 September 2015 and entered into among Zhabei Trade Union as vendor, Shanghai Zhabei Plaza as purchaser and Lai Fung as guarantor in relation to the Acquisition; has the meaning ascribed thereto in Part XV of the SFO; the board of Directors; has the meaning ascribed to it under the Listing Rules; esun Holdings Limited, an exempted company incorporated in Bermuda with limited liability, the issued shares of which are listed and traded on the Main Board of the Stock Exchange (Stock Code: 571); conditions of the Agreement which must be fully satisfied in order for the Agreement to take effect; has the meaning ascribed to it under the Listing Rules; the consideration payable by Shanghai Zhabei Plaza to Zhabei Trade Union in relation to the Acquisition; has the meaning ascribed to it under the Listing Rules; the deposit payable by Shanghai Zhabei Plaza to Zhabei Trade Union in accordance with the Agreement; the director(s) of the Company; the formal sale and purchase agreement to be entered into between Zhabei Trade Union as vendor and Shanghai Zhabei Plaza as purchaser in relation to the sale and purchase of the Property; the Company and its subsidiaries; Hong Kong dollars, the lawful currency of Hong Kong; 1

4 DEFINITIONS Hong Kong Lai Fung Lai Fung Group Latest Practicable Date Listing Rules Notice of the SGM percentage ratio(s) PRC the Hong Kong Special Administrative Region of the PRC; Lai Fung Holdings Limited, an exempted company incorporated in the Cayman Islands with limited liability, the issued shares of which are listed and traded on the Main Board of the Stock Exchange (Stock Code: 1125); Lai Fung and its subsidiaries; 19 November 2015, being the latest practicable date prior to the printing of this circular for the purpose of ascertaining certain information contained therein; the Rules Governing the Listing of Securities on the Stock Exchange; the notice convening the SGM, as set out on pages 47 and 48 of this circular; has the meaning ascribed to it in Rule of the Listing Rules; the People s Republic of China, and for the purpose of this circular, excludes Hong Kong, the Macau Special Administrative Region of the PRC and Taiwan; Property 6th to 11th Floors, Hui Gong Building* ( ), No. 99 Tian Mu Road West, Zhabei, Shanghai, the PRC, together with the corresponding land use rights and the right to use 20 carparking spaces in the basement; RMB SGM SFO Shanghai Zhabei Plaza Renminbi, the lawful currency of the PRC; a special general meeting of the Company to be convened and held for approving the Agreement and the transactions contemplated thereunder; the Securities and Futures Ordinance, Chapter 571 of the Laws of Hong Kong; Shanghai Zhabei Plaza Real Estate Development Company Limited* ( ), a limited liability company established and validly existing under the laws of the PRC and an indirect non-wholly-owned subsidiary of Lai Fung and the Company; 2

5 DEFINITIONS Share(s) Shareholder(s) sq.ft. sq.m. Stock Exchange subsidiary(ies) Zhabei Trade Union the ordinary share(s) of HK$0.50 each in the share capital of the Company; the duly registered holder(s) of the Share(s); square feet; square metre; The Stock Exchange of Hong Kong Limited; has the meaning ascribed to it under the Listing Rules; Federation of Trade Union of Zhabei District of Shanghai* ( ), an organisation established under the Trade Union Law of the PRC* ( ); and % per cent. For the purpose of illustration only and unless otherwise stated, conversion of RMB into HK$ in this circular is based on the exchange rate of RMB1 to HK$ Such conversion should not be construed as a representation that any amount has been, could have been, or may be, exchanged at this or any other rate(s). * For identification purposes only 3

6 LETTER FROM THE BOARD esun Holdings Limited (Incorporated in Bermuda with limited liability) (Stock Code: 571) Executive Directors: Registered Office: Mr. Lui Siu Tsuen, Richard (Chief Executive Officer) Clarendon House Mr. Chew Fook Aun 2 Church Street Mr. Lam Hau Yin, Lester Hamilton HM 11 Mr. Yip Chai Tuck Bermuda Non-executive Directors: Madam U Po Chu Mr. Andrew Y. Yan Independent Non-executive Directors: Mr. Low Chee Keong (Chairman) Mr. Lo Kwok Kwei, David Dr. Ng Lai Man, Carmen Mr. Alfred Donald Yap Head Office and Principal Place of Business: 11th Floor Lai Sun Commercial Centre 680 Cheung Sha Wan Road Kowloon, Hong Kong 23 November 2015 To the Shareholders Dear Sir or Madam, MAJOR TRANSACTION AGREEMENT IN RELATION TO ACQUISITION OF PROPERTY AND NOTICE OF SPECIAL GENERAL MEETING 1. INTRODUCTION Reference is made to the announcement dated 30 September 2015 jointly issued by the Company and Lai Fung in relation to the Acquisition. On 30 September 2015 (after trading hours), Shanghai Zhabei Plaza, being an indirect nonwholly-owned subsidiary of Lai Fung and the Company, Zhabei Trade Union and Lai Fung entered into the Agreement, pursuant to which Shanghai Zhabei Plaza conditionally agreed to acquire and Zhabei Trade Union conditionally agreed to sell the Property at the Consideration of approximately RMB355.1 million (equivalent to approximately HK$433.5 million). 4

7 LETTER FROM THE BOARD The Acquisition constitutes a major transaction for the Company and is subject to the reporting, announcement and shareholders approval requirements under Chapter 14 of the Listing Rules. The purpose of this circular is to provide the Shareholders with, among other things, (a) further details of the Agreement and the Acquisition; (b) other information required under the Listing Rules; and (c) the Notice of the SGM together with the form of proxy. 2. THE AGREEMENT Set out below is a summary of the principal terms and conditions of the Agreement: Date 30 September 2015 Parties Vendor: Purchaser: Guarantor: Zhabei Trade Union Shanghai Zhabei Plaza, an indirect non-wholly-owned subsidiary of Lai Fung and the Company Lai Fung The respective directors of Lai Fung and the Company, having made all reasonable enquiries, confirm that to the best of their knowledge, information and belief, Zhabei Trade Union and its ultimate beneficial owners are third parties independent of Lai Fung and the Company and their respective connected persons. Subject matter Pursuant to the Agreement, Shanghai Zhabei Plaza conditionally agreed to acquire and Zhabei Trade Union conditionally agreed to sell the Property. Consideration and related terms The Consideration shall be approximately RMB355.1 million (equivalent to approximately HK$433.5 million) and it shall be payable by Shanghai Zhabei Plaza to Zhabei Trade Union as follows: (1) A Deposit of approximately RMB53.3 million (equivalent to approximately HK$65.0 million), being 15% of the Consideration, shall be paid within 15 working days upon signing of the Agreement. 5

8 LETTER FROM THE BOARD (2) Subject to and upon satisfaction of the Conditions: (a) (b) (c) the Deposit shall be taken as the first instalment payment of the Consideration under the Agreement; a second instalment of approximately RMB142.0 million (equivalent to approximately HK$173.4 million), being 40% of the Consideration, shall be paid within 15 working days; and Shanghai Zhabei Plaza and Zhabei Trade Union shall enter into the Formal Sale and Purchase Agreement within 15 working days after full payment of the first and second instalments. (3) A third instalment of approximately RMB142.0 million (equivalent to approximately HK$173.4 million), being 40% of the Consideration, shall be paid within 15 working days after a receipt of acknowledgement has been issued by the Real Estate Trading Centre* ( ) in relation to the application for the transfer and registration of the Property in its name ( registration procedures ), and subject to the following steps having been implemented in advance: (a) (b) (c) Shanghai Zhabei Plaza or Zhabei Trade Union (as the case may be) taking the necessary steps to proceed with the procedures required to effect the change in the nature of land use rights of the Property from allocated land use rights to transferable land use rights. In this connection, Shanghai Zhabei Plaza has agreed to be responsible to pay the fees or compensation required by the PRC governmental authorities for the change in nature of land use rights of the Property, the amount of which will have to be negotiated with the relevant PRC governmental authorities; Zhabei Trade Union arranging for the vacation of occupants of the Property and delivering vacant possession of the Property to Shanghai Zhabei Plaza and completing related procedures. In this connection, Zhabei Trade Union has agreed to deliver vacant possession on or before 30 April 2016, save for units subject to litigation with occupants (if any) where vacant possession may be delivered on or before 31 March 2017; and Shanghai Zhabei Plaza and Zhabei Trade Union proceeding with the transfer and registration procedures in respect of the Property within 15 working days after completion of the procedures in (3)(a) and (b) above. 6

9 LETTER FROM THE BOARD (4) The final instalment of approximately RMB17.8 million (equivalent to approximately HK$21.7 million), being 5% of the Consideration, shall be paid within 15 working days upon Shanghai Zhabei Plaza receiving the new ownership certificate of the Property in its name incorporating the change in nature of land use rights mentioned above. The Consideration was determined after arm s length negotiation between Shanghai Zhabei Plaza and Zhabei Trade Union, with reference to, among other things, the market value of the Property, the increased potential of the Property when consolidated with the existing properties held by the Lai Fung Group in Northgate Plaza I and Northgate Plaza II as explained in the section headed REASONS FOR, AND THE BENEFITS OF, THE ACQUISITION below. The Consideration will be satisfied by the internal resources of the Lai Fung Group. Conditions The Agreement shall take effect upon satisfaction of the following conditions: (1) Zhabei Trade Union obtaining approval from the Federation of Trade Unions of Shanghai* ( ) and at a meeting of the relevant Standing Committee of the Chinese Communist Party* ( ); (2) the Shareholders approving the Acquisition and Lai Fung acting as a guarantor and assuming liability in relation to the obligations of Shanghai Zhabei Plaza under the Agreement; and (3) (if necessary) the Company having obtained all necessary approvals as required by the Listing Rules. Termination and related liabilities (a) Failure to satisfy the Conditions If the Conditions cannot be fully satisfied on or before 31 March 2016, the Agreement shall be terminated. In the event that the failure to satisfy the Conditions is on the part of Shanghai Zhabei Plaza or Lai Fung (including where approvals required from the Shareholders have not been obtained), Zhabei Trade Union shall be entitled to forfeit the Deposit; and if the Deposit is not sufficient to cover all losses incurred by Zhabei Trade Union, Shanghai Zhabei Plaza shall be liable to pay damages to Zhabei Trade Union. 7

10 LETTER FROM THE BOARD (b) Refusal by PRC authorities If the relevant authorities refuse to proceed with the transfer procedures or the change in nature of the land use rights in respect of the Property on or before 31 March 2017, Shanghai Zhabei Plaza and Zhabei Trade Union shall enter into friendly negotiation and, if such negotiation efforts fail, either party shall be entitled to terminate the Agreement. If the relevant authorities refusal is on account of Shanghai Zhabei Plaza, Zhabei Trade Union shall be entitled to unilaterally terminate the Agreement and claim damages against Shanghai Zhabei Plaza. If such refusal is not on the part of Shanghai Zhabei Plaza, Shanghai Zhabei Plaza or Zhabei Trade Union may terminate the Agreement, upon which Zhabei Trade Union shall, after deducting all relevant expenses and losses, return to Shanghai Zhabei Plaza all amounts that have been paid by Shanghai Zhabei Plaza without interest. (c) Failure to deliver vacant possession Without prejudice to any other claim for damages and unless otherwise specified in the Agreement, if Zhabei Trade Union fails to deliver vacant possession of the Property in accordance with the Agreement and within 15 working days after Shanghai Zhabei Plaza issuing a written notice, Shanghai Zhabei Plaza shall be entitled to demand compensation from Zhabei Trade Union with reference to the prevailing market rent of the Property. If Zhabei Trade Union s failure to deliver vacant possession of the Property results in the parties to the Agreement not being able to achieve their objectives thereunder, Shanghai Zhabei Plaza shall be entitled to unilaterally terminate the Agreement, upon which Zhabei Trade Union shall return to Shanghai Zhabei Plaza all amounts that have been paid by Shanghai Zhabei Plaza. (d) Failure of payment or other obligations Without prejudice to any other claim for damages and unless otherwise specified in the Agreement, if Shanghai Zhabei Plaza fails to pay the Consideration in accordance with the Agreement, or complete any procedure or provide any required information, Shanghai Zhabei Plaza shall be subject to a daily fine of an amount equivalent to 0.05% of the amount payable. If Shanghai Zhabei Plaza fails to rectify the breach within 15 working days after Zhabei Trade Union issuing a written notice, Zhabei Trade Union shall be entitled to unilaterally terminate the Agreement by written notice and forfeit all amounts that have been paid by Shanghai Zhabei Plaza. (e) Other material breaches Unless otherwise specified in the Agreement, if any party to the Agreement commits a material breach of any undertaking, representation or warranty under the Agreement or if any breach of the Agreement results in the inability to perform the Agreement, the observant party shall be entitled to unilaterally terminate the Agreement by written notice, and the defaulting party shall be liable to pay damages of an amount equivalent to 20% of the Consideration to the observant party and indemnify the observant party against all actual losses incurred by the observant party. 8

11 LETTER FROM THE BOARD 3. INFORMATION ABOUT THE PROPERTY The Property comprises 6th to 11th floors of Hui Gong Building* ( ), which is situated at No. 99 Tian Mu Road West, Zhabei, Shanghai, the PRC, together with the corresponding land use rights and the right to use 20 car-parking spaces in the basement. Hui Gong Building* ( ) is a mixed-use building, and the Property, which has a total gross floor area of approximately 10,345 sq.m., comprises various shops and office apartments. The land use rights of the Property were designated for recreation and entertainment. Lai Fung Group also owns 99% of the interest in 1st to 5th floors of Hui Gong Building* ( ). While the existing use of the Property may be contrary to its permitted usage, (a) the Acquisition is on the basis that the existing occupants will be vacated meaning that the possible non-permitted usage will cease; (b) the nature of the land use rights will be changed and an application will be made for that purpose; and (c) the acquisition of the Property is premised on prior satisfaction of the matters set out in (a) and (b) above such that the relevant governmental authority will issue a new land use right certificate to the acquirer reflecting the change in the nature of the land use rights. The Acquisition will not proceed unless the above matters can be satisfied. The PRC legal advisers to the Company have advised that as the Company is acquiring the Property and not the holding company of the Property, non-compliance, if any, with the current permitted usage will not affect the acquirer and further that given the structure of the Acquisition as described above, non-compliance, if any, with the current permitted usage has no impact on the proposed acquisition of the Property and the Group. The PRC legal advisers to the Company have further advised that, for the purpose of considering the application for the change in the nature of the land use rights, the relevant PRC governmental authorities will focus on the proposed change in the nature of the land use rights and the premium involved, and non-compliance, if any, with the existing usage of the Property will have no bearing on the application as (i) any such non-compliance will cease, and (ii) it relates only to the previous/ existing owner and the acquirer is not privy to such noncompliance, if any. 4. REASONS FOR, AND THE BENEFITS OF, THE ACQUISITION The Property is physically connected to Northgate Plaza I ( NG I ) which is 99%-owned by the Lai Fung Group. The Board of Lai Fung considers that the Acquisition will represent a good opportunity for the Lai Fung Group to consolidate its interests in a property that it already owns. It will facilitate the redevelopment plan of NG I and the adjacent Northgate Plaza II and enhance the overall value of the combined development once they are redeveloped. The valuation report set out in Appendix III to this circular shows the market value of the NG I together with the Property (collectively Enlarged NG I ) as at 30 September 2015 assuming the Acquisition had been completed. Lai Fung is a non-wholly-owned subsidiary of the Company. The Company will maintain an indirect interest in the Property through Lai Fung upon completion of the Acquisition. 9

12 LETTER FROM THE BOARD The respective boards of Lai Fung and the Company believe that the terms of the Agreement are on normal commercial terms and are fair and reasonable, and that the Acquisition is in the respective interests of Lai Fung and the Company and their respective shareholders as a whole. 5. INFORMATION ABOUT ZHABEI TRADE UNION Zhabei Trade Union is an organisation established under the Trade Union Law of the PRC*( ), principally engaging in the organisation of cultural and training activities and the provision of recreational facilities and services. 6. INFORMATION ABOUT SHANGHAI ZHABEI PLAZA, LAI FUNG AND THE COMPANY Shanghai Zhabei Plaza is principally engaged in property development and investment. As at the Latest Practicable Date, Lai Fung and the Company indirectly held 99% and 50.79% of the registered capital of Shanghai Zhabei Plaza, respectively. Lai Fung is an exempted company incorporated in the Cayman Islands with limited liability, the issued shares of which are listed and traded on the Main Board of the Stock Exchange. The principal activity of Lai Fung is investment holding. The principal activities of the Lai Fung Group include property development for sale and property investment for rental purposes in the PRC. As at the Latest Practicable Date, the Company indirectly held approximately 51.30% of the total issued shares of Lai Fung. The Company is an exempted company incorporated in Bermuda with limited liability, the issued shares of which are listed and traded on the Main Board of the Stock Exchange. The Company acts as an investment holding company and the principal activities of its subsidiaries include the development, operation of and investment in media and entertainment, music production and distribution, the investment in and production and distribution of television programmes, films and video format products, cinema operation, the sale of cosmetic products as well as property development for sale and property investment for rental purposes. 10

13 LETTER FROM THE BOARD 7. FINANCIAL EFFECTS TO THE GROUP IN RELATION TO THE ACQUISITION As disclosed above, the Acquisition is by its nature an acquisition of the Property. The Property is physically connected to NG I which is 99%-owned by the Lai Fung Group. Based on the unaudited pro forma consolidated statement of assets and liabilities as set out in Appendix IV to this circular, taking into account (i) the Consideration of approximately RMB355.1 million (translated at approximately HK$442.5 million) (the valuation report of the Property is set out in Appendix II to this circular); (ii) the estimated additional land premium of approximately RMB52.6 million (translated at approximately HK$65.6 million) mainly for the change in the nature of land use rights of the Property from allocated land use rights to transferable land use rights; (iii) the estimated PRC taxes in relation to the Acquisition in accordance with the PRC applicable tax rules of approximately RMB9.5 million (translated at approximately HK$11.8 million); (iv) the audited carrying amount of NG I as at 31 July 2015 of approximately RMB691.7 million (translated at approximately HK$862.0 million); and (v) the valuation of the Enlarged NG I upon the completion of the Acquisition ( Completion ) of approximately RMB1,110.0 million (translated at approximately HK$1,383.2 million) (the valuation report of the Enlarged NG I is set out in Appendix III to this circular), the Group expects to recognise in its consolidated income statement an estimated profit, upon the Completion, of approximately RMB0.8 million (translated at approximately HK$1.0 million), including the estimated fair value gain of approximately RMB1.1 million (translated at approximately HK$1.3 million) and the corresponding deferred tax expense of approximately RMB0.3 million (translated at approximately HK$0.3 million). Based on the unaudited pro forma consolidated statement of assets and liabilities, upon the Completion, the consolidated total assets and consolidated total liabilities of the Group as at 31 July 2015 would be increased by approximately HK$1.3 million and approximately HK$0.3 million, respectively. The actual financial effects are expected to be different from the amounts presented above. The unaudited pro forma consolidated statement of assets and liabilities has been prepared for illustrative purpose only, based on the judgement and assumptions of the Directors, and may not reflect the true financial position of the Group at Completion or any future date. Exchange rate of RMB1 to HK$1.2461, being the closing rate on 31 July 2015 adopted for the preparation of audited consolidated statement of financial position of the Group, is used to the pro forma adjustments for illustrative purpose only. Upon the Completion, the actual financial effects for accounting purposes will need to be recalculated based on the actual carrying amount of NG I upon the Completion, the fair value of the Enlarged NG I upon the Completion and the actual additional land premium and PRC taxes incurred and are expected to be different from the amounts disclosed above. 11

14 LETTER FROM THE BOARD 8. IMPLICATIONS UNDER THE LISTING RULES Lai Fung was a 51.30%-owned subsidiary of the Company as at the Latest Practicable Date. As one of the applicable percentage ratios in respect of the Acquisition is more than 25% but less than 100%, the Acquisition constitutes a major transaction for the Company and is subject to the reporting, announcement and shareholders approval requirements under Chapter 14 of the Listing Rules. The SGM will be held to consider, and if thought fit, pass the requisite resolution(s) to approve the Agreement and the transactions contemplated thereunder by way of poll. To the best knowledge, information and belief of the Directors, as at the Latest Practicable Date, neither the Shareholders nor any of their close associates has a material interest in the Acquisition. No Shareholder is therefore required to abstain from voting on the proposed resolution to approve the Agreement and the transactions contemplated thereunder in the SGM. 9. SGM The SGM will be held at Harbour View Rooms I & II, 3/F., The Excelsior, Hong Kong, 281 Gloucester Road, Causeway Bay, Hong Kong on Friday, 11 December 2015 at 10:15 a.m. (or as soon thereafter as the 2015 annual general meeting of the Company convened at the same place and on the same date at 10:00 a.m. shall have been concluded or adjourned) to consider and, if thought fit, approve, among other things, the Acquisition. The Notice of the SGM is set out on pages 47 and 48 of this circular. If you do not intend to be present at the SGM or its adjournment (as the case may be) in person but wish to exercise your rights as a Shareholder, please complete and sign the accompanying form of proxy (also published on both the websites of the Company at and the Stock Exchange at in accordance with the instructions printed thereon and deposit the same with the Company s branch share registrar in Hong Kong, Tricor Tengis Limited at Level 22, Hopewell Centre, 183 Queen s Road East, Hong Kong as soon as possible, but in any event not less than 48 hours before the time fixed for holding the SGM or any adjournment thereof (as the case may be). Completion and return of the form of proxy should not preclude you from attending and voting in person at the SGM or any adjournment thereof (as the case may be) should you so wish and in such event, the instrument appointing a proxy shall be deemed to be revoked. 10. VOTING BY POLL In compliance with Rule 13.39(4) of the Listing Rules, save for resolutions which relate purely to procedural or administrative matters to be voted on by a show of hands, voting on the resolution proposed at the SGM shall be decided by way of a poll. Bye-law 66 of the Company s Bye-laws provides that on a poll, every member present in person or by proxy or in the case of a member being a corporation, by its duly authorised representative, shall have one vote for every fully-paid Share of which he/she/it is the holder. 12

15 LETTER FROM THE BOARD An explanation of the detailed procedures of conducting a poll will be provided to the Shareholders at the SGM. Tricor Tengis Limited, the branch share registrar of the Company in Hong Kong, will serve as the scrutineers for the vote-taking. The Company will publish an announcement on the poll result on the respective websites of the Company at com and the Stock Exchange at shortly after the conclusion of the SGM pursuant to Rule 13.39(5) of the Listing Rules. 11. RECOMMENDATION The Directors (including the independent non-executive Directors) consider that the terms and conditions of the Agreement are on arm s length basis and on normal commercial terms, and are fair and reasonable as well as in the interests of the Company and the Shareholders as a whole. Accordingly, the Directors recommend all Shareholders to vote in favour of the ordinary resolution to be proposed at the SGM to approve the Agreement and the transactions contemplated thereunder. 12. ADDITIONAL INFORMATION Your attention is also drawn to the additional information set out in the appendices to this circular and the Notice of the SGM. The English version shall prevail in case of any discrepancy or inconsistency between this English version and its Chinese translation. Yours faithfully, For and on behalf of the Board of esun Holdings Limited Low Chee Keong Chairman 13

16 APPENDIX I FINANCIAL INFORMATION OF THE GROUP 1. FINANCIAL INFORMATION OF THE GROUP The audited consolidated financial statements and the independent auditors report of the Group (i) for the year ended 31 July 2015 are disclosed on pages 66 to 199 of the annual report of the Company for the year ended 31 July 2015 published on 11 November 2015; (ii) for the year ended 31 July 2014 are disclosed on pages 61 to 203 of the annual report of the Company for the year ended 31 July 2014 published on 7 November 2014; and (iii) for the year ended 31 July 2013 are disclosed on pages 61 to 188 of the annual report of the Company for the year ended 31 July 2013 published on 23 October The above annual reports of the Company have been published on the respective websites of the Stock Exchange ( and the Company ( 2. INDEBTEDNESS As at the close of business on 30 September 2015, being the latest practicable date for ascertaining certain information relating to this indebtedness statement, the Group had outstanding consolidated total borrowings (after intra-group elimination) of approximately HK$6,587 million, comprising unsecured and unguaranteed other borrowings from a former shareholder of the Company, including accrued interest, of approximately HK$245 million, unsecured and unguaranteed 3-year zero coupon convertible notes with an aggregate carrying amount of approximately HK$154 million, fixed rate senior notes of approximately HK$2,177 million, secured bank loans of approximately HK$2,867 million, secured guaranteed notes of approximately HK$779 million, and unsecured and unguaranteed loans from a joint venture of approximately HK$365 million. As at 30 September 2015, certain properties (including investment properties, land and buildings, properties under development, completed properties for sale, serviced apartments and related properties), a leasehold building and certain bank balances and time deposits were pledged to banks to secure bank loan facilities granted to the Group. Equity interests in certain subsidiaries of the Group were pledged to banks to secure certain bank loan facilities granted to the Group. In addition, certain subsidiaries of the Group have also provided corporate guarantees in favour of the banks in respect of certain general banking facilities and certain secured bank loan facilities granted to the Group. All of the Group s fixed rate senior notes are secured. A bank balance and certain equity interests in certain subsidiaries of the Group were pledged to holders of the fixed rate senior notes to secure such notes issued by the Group (shared on a pari passu basis with certain bank loan facilities of the Group). In addition, certain subsidiaries of the Group have also provided corporate guarantees in favour of the holders of fixed rate senior notes in respect of such notes issued by the Group. 14

17 APPENDIX I FINANCIAL INFORMATION OF THE GROUP The guaranteed notes are secured by the share charge in respect of the ordinary shares of Lai Fung and certain ordinary shares of Media Asia Group Holdings Limited ( MAGHL, together with Lai Fung are indirect non-wholly-owned subsidiaries of the Company) granted by certain subsidiaries of the Company and the account charge in respect of the interest reserve accounts for all amounts payable on the notes. The guaranteed notes are guaranteed by the Company and have the benefit of a keepwell and security shortfall support deed and a deed of equity interest purchase undertaking by Lai Sun Development Company Limited, the controlling shareholder of the Company. The Group had provided guarantees to certain banks in respect of mortgage loan facilities granted by such banks to certain end-buyers of property units developed by the Group. Pursuant to the terms of the guarantees, upon default in mortgage payments by these endbuyers, the Group will be responsible to repay the outstanding mortgage loan principals together with accrued interest owed by the end-buyers in default. The Group s obligation in relation to such guarantees has been gradually relinquished along with the settlement of the mortgage loans granted by the banks to the end-buyers. Such obligation will also be relinquished when the property ownership certificates for the relevant properties are issued and/or the end-buyers have fully repaid the mortgage loans. As at the close of business on 30 September 2015, in respect of these guarantees, the contingent liabilities of the Group were estimated to be amounted to approximately HK$150 million. The Group had provided corporate guarantees to certain banks in connection with the general banking facilities granted to the Group and the facilities were utilised by the Group to the extent of approximately HK$15 million as at 30 September Save as aforesaid and apart from intra-group liabilities, the Group did not, as at 30 September 2015, have any material outstanding (i) debt securities, whether issued and outstanding, authorised or otherwise created but unissued, or term loans, whether guaranteed, unguaranteed, secured (whether the security is provided by the Group or by third parties) or unsecured; (ii) other borrowings or indebtedness in the nature of borrowings including bank overdrafts and liabilities under acceptances (other than normal trade bills) or acceptance credits or hire purchase commitments, whether guaranteed, unguaranteed, secured or unsecured; (iii) mortgage or charges; or (iv) guarantees or other contingent liabilities. 3. WORKING CAPITAL The Directors are of the opinion that, in the absence of any unforeseen circumstances and after taking into account (i) the internal resources of the Group; (ii) the Group s presently available banking facilities and the expected refinancing of certain bank loans, and the Directors are optimistic that the refinancing of such bank loans would be able to be carried out; and (iii) the completion of the Acquisition, the Group has sufficient working capital for its requirements for at least 12 months from the date of this circular. 15

18 APPENDIX I FINANCIAL INFORMATION OF THE GROUP 4. FINANCIAL AND TRADING PROSPECTS OF THE GROUP The principal activities of the Group include the development, operation of and investment in media and entertainment, music production and distribution, the investment in and production and distribution of television programmes, films and video format products, cinema operation, the sale of cosmetic products as well as property development for sale and property investment for rental purposes. Media and entertainment/film production and distribution/cinema operation The PRC entertainment market continues to grow at an unprecedented pace. The Group continues to expand its media and entertainment businesses in the PRC, thereby maximising income from its film, TV, live entertainment, artiste management, music and cinema in this fast growing market. The Group is well positioned to capitalise on this trend with its solid foundation in the industry and achieved good progress for the year ended 31 July Film The Group continues drive to increase its original production of films which appeal to Chinese language audiences and foresees a solid distribution pipeline in the year to come with a slate of films currently in development and production. Emphasis will be put on increasing production capabilities and deriving more fee related income from the production. TV The Group has expanded its activities in production and investments in quality TV drama series in line with the continued strong demand for good programmes from TV stations and online video websites in the PRC as well as a way to provide exposure and training for the Group s stable of artistes. The Group will focus on developing scripts of early episodes of different series as a way to secure investors and television stations interests early therefore to secure distribution and co-development opportunities. Moreover, the Group is also looking to move into other types of TV programmes such as variety shows and reality series which shall create synergy with the Group s other media and entertainment businesses. Live Entertainment The Group has successfully produced and promoted a large number of major concerts in Hong Kong and the PRC performed by prominent local, Asian and international artistes. The Group is expanding its activities and continues to be a driving force in this area whilst exploring other types of live entertainment such as musicals and theatrical performances in addition to concerts. Artiste Management The Group has expanded its Chinese artiste roster as well as collaborated with high profile Asian artistes such as top Korean music groups. With diverse projects including film, TV, music and live events which ensure maximum commercial value and appeal, the Group is in a good position to attract stars and develop new talents. 16

19 APPENDIX I FINANCIAL INFORMATION OF THE GROUP Music As international music labels are coming to a mutually acceptable licensing model with major Chinese music portals, the long awaited pay model for digital music is taking shape. With a vast and well-known Chinese music library under management and a continual supply of new hits, the Group is poised to capitalise on this new economic model. Cinema Acquisition of Intercontinental Group Holdings Limited bolstered the Group s ambition in this segment and supplemented the film distribution segment of the Group in Hong Kong and the PRC. Our new cinema in Causeway Bay in Hong Kong, the Grand Windsor Cinema, was opened on 26 September The Group has granted exclusive licenses to Taobao (China) Software Co. Ltd., amongst other things, to distribute the Group s music recordings and music videos via internet in the PRC. The Group is also working with a leading mobile game operator to sponsor and promote their movies via a popular mobile game. A developing sitcom is a collaboration project with an e-commence operator and the Group is also developing a mini drama series tailor made for internet broadcasting with a major internet operator. In summary, the Group believes that its integrated media platform comprising film, TV, live entertainment, artiste and events management, music and cinema presents the most balanced and synergistic approach to growing a Chinese entertainment powerhouse. The Group will continue to optimise its resources and strive towards this goal. Property development and investment in the PRC The regional focus of the Lai Fung Group, coupled with the rental-led strategy that it has adopted since 2012, has proved to be successful in such a challenging operating environment. The rental portfolio of approximately 2.9 million sq.ft., primarily in Shanghai and Guangzhou, resulted in a steady increase in rental income with close to full occupancies for key assets, despite a general slowdown in retail sales. Asset enhancement aimed at improving foot traffic at the higher levels of the retail podium of Shanghai Hong Kong Plaza has been completed. New tenants have commenced operations during the year ended 31 July 2015 which is expected to improve the overall rental contribution from this property. During the year ended 31 July 2015, the sale of Guangzhou King s Park, Guangzhou Eastern Place Phase V residential portion and Guangzhou Dolce Vita had been encouraging. The Lai Fung Group experienced a steady increase in average selling prices in these projects which indicated the strength and depth of the underlying demand. 17

20 APPENDIX I FINANCIAL INFORMATION OF THE GROUP The Lai Fung Group has a number of projects in various stages of development in Shanghai, Guangzhou, Zhongshan and Hengqin. The rental portfolio is expected to increase from approximately 2.9 million sq.ft. to approximately 7.0 million sq.ft. through developing the existing projects in the next few years. The remaining residential units in Guangzhou Dolce Vita Phases IV and V, Guangzhou King s Park and Guangzhou Eastern Place Phase V are expected to contribute to the profit and loss account in the current and coming financial years. As at 31 July 2015, the Lai Fung Group has a landbank of approximately 9.9 million sq.ft.. The Lai Fung Group will continue its prudent and flexible approach in growing its landbank. 5. MATERIAL ADVERSE CHANGE The Directors confirm that as at the Latest Practicable Date, they were not aware of any material adverse change in the financial or trading position or outlook of the Group since 31 July 2015, being the date to which the latest published audited consolidated financial statements of the Company were made up. 18

21 APPENDIX II VALUATION REPORT OF THE PROPERTY The following is the text of a letter and valuation report, prepared for the purpose of incorporation in this circular received from Knight Frank Petty Limited, an independent property valuer, in connection with their valuation of the Property as at 30 September 2015: Board of Directors esun Holdings Limited 11th Floor Lai Sun Commercial Centre 680 Cheung Sha Wan Road Kowloon, Hong Kong 23 November 2015 Dear Sirs Knight Frank Petty Ltd 4/F, Shui On Centre 6-8 Harbour Road Wanchai Hong Kong T F Valuation of Levels 6 to 11 and 20 Basement Car Parking Spaces of Hui Gong Building, No. 99 Tian Mu Road West, Zhabei District, Shanghai, the People s Republic of China In accordance with the instructions from esun Holdings Limited (the Company ) and/or its subsidiaries, associates or joint ventures (hereinafter together referred to as the Group ) for us to value the captioned property interest in the People s Republic of China (the PRC ), we confirm that we have carried out inspections, made relevant enquiries and obtained such further information as we consider necessary for the purpose of providing you with our opinion of the market value of the property interest as at 30 September Basis of Valuation Our valuation is our opinion of the market value of the property interest which we would define as the estimated amount for which an asset or liability should exchange on the valuation date between a willing buyer and a willing seller in an arm s-length transaction after proper marketing and where the parties had each acted knowledgeably, prudently and without compulsion. 19

22 APPENDIX II VALUATION REPORT OF THE PROPERTY The market value is the best price reasonably obtainable in the market by the seller and the most advantageous price reasonably obtainable in the market by the buyer. This estimate specifically excludes an estimated price inflated or deflated by special terms or circumstances such as atypical financing, sale and leaseback arrangements, special considerations or concessions granted by anyone associated with the sale, or any element of special value. The market value of an asset or liability is also estimated without regard to costs of sale or purchase (or transaction) and without offset for any associated taxes or potential taxes. Valuation Methodology We have valued the property interest by using Direct Comparison Approach whenever market comparable transactions are available and assumed sale of property interest with the benefit of vacant possession. Title Documents and Encumbrances We have been provided by the Group with extracts of title documents relating to the property interest. However, we have not inspected the original documents to ascertain any amendments which may not appear on the copies handed to us by the Group. In the course of our valuation, we have relied on the information given by the Group and its PRC legal adviser, Allbright Law Offices, regarding the title and other legal matters relating to the property. No allowance has been made in our report for any charges, mortgages or amounts owing on the property interest nor for any expenses or taxation which may be incurred in affecting a sale. Unless otherwise stated, it is assumed that the property is free from encumbrances, restrictions and outgoings of an onerous nature which could affect its value. Source of Information We have relied to a considerable extent on the information given by the Group and the legal opinion of the Group s PRC legal adviser. We have no reason to doubt the truth and accuracy of the information provided to us by the Group and/or its PRC legal adviser which is material to the valuation. We have accepted advice given by the Group on such matters as planning approvals or statutory notices, easements, tenure, completion date of buildings, particulars of occupancy, sites and floor areas. Dimension, measurements and areas included in the valuation report attached are based on information provided to us and are therefore only approximations. We have not been able to carry out on-site measurements to verify the correctness of sites and floor areas of the property. We have exercised our due diligence in verifying the provided sites and floor areas by checking against the relevant documents provided. We were also advised by the Group that no material facts have been omitted from the information provided. 20

23 APPENDIX II VALUATION REPORT OF THE PROPERTY Inspection and Structural Condition We have inspected the property. The inspection was carried out by our Executive Director, Mr. Clement Leung in October However, no structural survey has been made, but in the course of our inspection, we did not note any serious defects. We are not, however, able to report that the property is free from rot, infestation or any other structural defects, nor were any tests carried out to any of the services. Identity of Property to be valued We exercised reasonable care and skill (but will not have an absolute obligation to you) to ensure that the property, identified by the property addresses in your instructions, is the property inspected by us and contained within our valuation report. If there is ambiguity as to the property addresses, or the extent of the property to be valued, this should be drawn to our attention in your instructions or immediately upon receipt of our report. Environmental Issues We are not environmental specialists and therefore we have not carried out any scientific investigations of sites or buildings to establish the existence or otherwise of any environmental contamination, nor have we undertaken searches of public archives to seek evidence of past activities that might identify potential for contamination. In the absence of appropriate investigations and where there is no apparent reason to suspect potential for contamination, our valuation is prepared on the assumption that the property is unaffected. Where contamination is suspected or confirmed, but adequate investigation has not been carried out and made available to us, then the valuation will be qualified. Remarks In preparing our valuation report, we have complied with The HKIS Valuation Standards (2012 Edition) published by the Hong Kong Institute of Surveyors and all requirements contained in the provision of Chapter 5 and Practice Note 12 of the Rules Governing the Listing of Securities issued by The Stock Exchange of Hong Kong Limited. 21